All Forum Posts by: Luan Nguyen

I have a project to build a condominium: three buildings in three years (each building A, B, C for each year 1, 2, 3). I have projected revenue, gross profit and net profit for building A in year 1, building B in year 2 and bulding C in year 3. How do I calculate the IRR for the whole project A, B, C?

Please note cost of sales for each building is equal to the development cost of each building (gross profit = revenue - cost of sales)

So when I put the data in Excel, to calculate IRR, the development cost should be the first number (negative), then in the next cell, the cash flow should be net profit + development cost (since net profit is the result of revenue minus cost of sales, if we do not add back development cost (equal to cost of sales) to the cash flow, we would calculate it twice - one from the first negative number and one from the result of net income from revenue). Is that IRR calculation correct?

Does BiggerPockets have a calculator to calculate this kind of project? 

Thank you. 

1. I can't give the name publicly. They are in a trading business but gross profit from that business is only 1% while the rest 99% is from leasing their buildings. Gross profit from leasing = $2.3 million. I think the majority of it is from number 2. 

2. On that street in Ho Chi Minh City, 1 square meter = $45,000 (market price). 798 square meters x 45,000 = $35.9 million. But the actual area where they built the building is about 500 square meters, so equal to $22.5 million. 

3. There was only one bidder so the auction failed. It shows not many people know about this. They will auction again in the future. 

4. These buildings have over 90% utilization rate. 

Hi my name is Luan from Vietnam. I'm an investment associate managing $100 million at a leading investment bank in Vietnam. Recently there's a deal to buy 22% shares of a company that owns several premium real estate locations in Ho Chi Minh City at a total price of $14 million:

1. Head office: area size 147 square meters, construction floor 707 square meters

2. Commercial tower: area size 798 square meters, construction floor 5,815 square meters

3. Office tower: area size 511 square meters, construction floor 3,618 square meters

and several other warehouses with total areas (including those above) of 19,909 square meters and construction floor of 20,471 square meters. 

Since number 2 alone is worth at least $22 million, because it's a prime location and is currently rented by a worldclass luxury goods brand, I think this deal is so cheap. 

The auction started at a price that valued the whole business at $14 million, so I thought it was very attractive. Do you think so?